Adelaide Brighton Ltd - Analyst. Analyst and investor meetings. Presented by: Mark Chellew Managing Director and CEO. April2013.

Transcription

1 Adelaide Brighton Ltd Analyst and investor meetings Presented by: Mark Chellew Managing Director and CEO 4 April 2013 Disclaimer The following presentation has been prepared by Adelaide Brighton Limited ACN for information purposes only. The presentation may contain forward looking statements or statements of opinion. No representation or warranty is made regarding the accuracy, completeness or reliability of the forward looking statements or opinion, or the assumptions on which either is based. All such information is, by its nature, subject to significant uncertainties outside of the control of the Company. To the maximum extent permitted by law, the Company and its officers do not accept any liability for any loss arising from the use of the information contained in this presentation. The information included in this presentation is not investment or financial product advice. Before making any investment decision, you should seek appropriate financial advice, which may take into account your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. Adelaide Brighton Ltd - Analyst Analystand andinvestor investormeetings meetings44april April

2 Financial highlights $m 31 Dec Dec 2011 % change Revenue 1, , EBIT PBT NPAT attributable to members Cents EPS Final dividend Full year dividend Key profit drivers Mining, resources and infrastructure projects in SA, WA and NT Weakness in residential and non-residential building Demand in Vic and Qld remained weak, affecting returns from joint ventures and sales into these markets Cement margins constrained by increasing costs and limited price growth Energy costs increased 8%, including the $3 million after tax impact of the carbon tax Clinker production issues at Birkenhead cost $6 million EBIT Lime margins helped by increased prices; volumes improved more than 5% from alumina and gold demand Cost savings of $8.5 million partly offset increasing energy and labour costs 4

3 Operational highlights Significant progress on capital program in cement and lime to enhance capacity and operational efficiency Major customer contract renewals in key cement markets of SA, WA and Vic Clinker import supply secured with major Japanese producers for long term requirements at competitive prices Acquisition of 30% stake in Malaysian white cement producer secures long term supply of important product 5 Consistent long term strategy Consistent strategy over the last decade has supported shareholder returns: Cost reduction and operational improvement across the business Development of the lime business to supply the resources sector in WA, SA and NT Focused and relevant vertical integration into downstream concrete, masonry and aggregates businesses Cement: Investment to expand cement milling capacity at Birkenhead, SA Development of efficient and flexible import supply chain into major markets Industrial Lime: Improvements in environmental performance and efficiency Capacity expansion to meet increased resource sector demand 6

4 Market demand 000 s m3 25,500 The 2010 recovery plateaued through 2011 and ,000 24,500 24,000 23,500 23,000 22,500 Projects and resources offsetting weakness in commercial and residential Inclusion of previously unreported concrete producers in headline ABS figures from 1 Jul 2012 overstates improvement in 2H ,000 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 ABS Headline Sep-11 Dec-11 Mar-12 ABC Estimate Jun-12 Sep-12 Dec-12 National concrete market expected to decline in 2013 Source: ABS and estimate by ABC 7 Key profit and operational challenges Industry remains highly competitive while residential and commercial building demand remains weak Weak building demand Demand weakness impacting Sunstate and ICL Threat of small-scale lime imports in WA and NT and cement imports in NT and north west WA High AUD limits the scope for cost recovery for any domestic manufacturer Increasing gas costs and carbon tax Birkenhead upgrade and reliability remains a key focus Capacity upgrades and reliability Energy costs and carbon tax High AUD limits price growth Sunstateand ICL Import competition and strong A$ 8

5 2013 Outlook Cement and clinker sales volumes in 2013 expected to be marginally lower than 2012 Demand from projects in SA, WA and NT likely to partially offset weakness in residential and non-residential building Demand in Vic expected to be less than 2012 Returns from Birkenhead, SA, cement mill 7 lower than previously estimated due to weaker Victorian market demand Overall, earnings from JVs and associates expected to be lower Lime volumes could be marginally higher in threat of small scale imports remains Completion of Munster, WA, kiln 5 bag house filter expected mid 2013 Focus on efficiency in masonry, pre-mixed concrete and aggregates, where markets remain subdued Concrete and aggregates price rises notified for 1 April 2013 and masonry prices rises 1 June Outlook Costs pressures continue across the Company, especially from energy, the carbon tax and environmental requirements Carbon tax impact on 2013 expected to be circa $6 million after tax, before mitigation Strong Australian dollar and competitive pressures may limit scope for cement price increases Plant and quarry rationalisation may realise circa $100 million in surplus land over the next 2-10 years Adelaide Brighton will pursue growth in shareholder returns through projects that improve efficiency and capitalise on long term demand growth in key markets 10